Flipkart’s quick-commerce FOMO

Top of the Morning

Welcome to Top of the Morning by Mint, your weekday newscast that brings you five major stories from the world of business. It's Wednesday, May 22, 2024. My name is Nelson John. Let's get started.

Indian benchmark indices climbed off the day's high to close on a mixed note on Tuesday. Sensex fell marginally by 52 points to end the day 0.07 percent below its previous close while Nifty rose 27 points to close 0.12 per cent higher.

India's IPO market is heating up and could be on track to set a new record in FY25. The apparent surge in enthusiasm seems to defy the usual election-season jitters. Just two months into the financial year, new share offerings valued at more than Rs 50,000 crore are already in the pipeline. This figure is fast approaching the nearly Rs 62,000 crore that 76 companies raised through mainboard IPOs in FY24. Well-known companies such as Ola Electric Mobility, Swiggy, and NSDL are among those that have filed for IPOs with the Securities and Exchange Board of India, and with heavy hitters like Tata Capital and Hexaware Technologies also expected to join the fray, the buzz is undeniable. Mint’s Dipti Sharma and Ranjani Raghavan spoke to market experts who are particularly bullish on the IPO scene. They predict the number and size of IPOs in FY25 could double those of the previous year. Munish Aggarwal of Equirus echoed this optimism and suggested that barring any major volatility, issuances could top ₹1.5 trillion this year—a milestone previously achieved only in FY22. The growing IPO market isn't just about raising more funds; it's a testament to the maturing of India's primary markets.

The expanding real estate market has seen a distinct shift in dynamics that has particularly affected the availability and sales of affordable housing. Over the past five years, there's been a noticeable decline in the sale of homes priced ₹40 lakh or less in top Indian cities, even as the overall property sector has seen a recovery. The share of affordable housing in total home sales dropped dramatically from 38% in 2019 to just 19% by 2023, with a slight increase to 20% in early 2024. This trend is mirrored in the supply of new budget housing projects, which plummeted from 40% to 18% over the same period. Conversely, the luxury housing segment has thrived during this period. Benefiting from the real estate upcycle post-pandemic, luxury homes have seen an increase in both supply and sales. So, is there a way the affordable housing market could see a recovery? In which cities is this trend most visible? And has the government decided to step in? Mint’s Madhurima Nandy tackles these questions in today’s Mint Primer.

Just days after the world’s largest sovereign wealth fund, Norway’s Norges Bank, blacklisted its ports business, Gautam Adani's conglomerate is setting up a $3 billion fund to enhance its global ports capacity significantly. The Adani Group aims to create a strong presence in the crucial international trade corridor linking India with Europe through Central and West Asia, two company insiders told Mint’s senior editor Anirudh Laskar. The move is part of a strategic push to capitalise on the increasing export demands for commodities such as iron-ore and coal from India.

The plan includes a substantial 25-30% increase in international port capacity over the next two years, primarily through acquisitions. The expansion will see Adani's current container-handling capacity increase from about 600 million metric tons a year to 800 million.

Have you ever wondered how India’s polling stations have evolved since Independence? In the latest instalment of Mint’s election data series, Nandita Venkatesan looks at the math around India’s polling stations. As India’s population has grown, the number of polling stations has skyrocketed from just over 200,000 in the 1960s to one million in the 2019 Lok Sabha elections. The average number of voters per station has declined, however, from more than 1,000 per booth in the 1960s to 879 in 2019, thanks to efforts to make voting less of a hassle. But here’s where it gets interesting — not all polling stations are under the same pressure. In 2019, places in Kerala, Bihar and Rajasthan recorded the highest number of voters per station, while those in northeastern states such as Manipur, Mizoram, and Arunachal Pradesh had among the fewest voters each. Click the link in the show notes to read the full story, illustrated with charts and an interactive map prepared by Nandita and her team.

E-commerce major Flipkart is feeling the heat from quick-commerce companies such as Blinkit, Swiggy Instamart, and Zepto. Having started by delivering groceries, these platforms now offer everything from electronics to personal care items, encroaching on Flipkart’s turf. They’ve mastered the art of ultra-fast delivery, delivering products in 15-20 minutes from dark stores and reshaping consumer expectations in the process. The rise of quick commerce has been nothing short of explosive. Their gross merchandise value (GMV) jumped from just $0.1 billion in 2020 to $2.8 billion by 2023. The business taps the increasing need for instant gratification — a trend that Flipkart has previously tried to capture, albeit with little success.

Owned by Walmart, Flipkart pioneered online shopping in India but has stumbled in the quick-commerce race. Initiatives such as Flipkart Nearby and Flipkart Quick were bogged down by logistical snags and inventory issues that made speedy delivery impossible. Now, it seems Flipkart is gearing up for another shot at quick commerce, fearing it could lose more ground to these nimble competitors. Mint’s startup correspondent Samikdha Goel examines the company’s quick-commerce FOMO in today’s Long Story.

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Show notes:

IPO rush sets up India’s equity market for another record year

Mint Primer: Budget homes are in coma. Can they be revived?

Adani group plans to invest $3 billion to boost international ports business

How many polling stations does it take to conduct India's elections?

Flipkart has FOMO? Zepto and Blinkit are changing the e-commerce giant